The dollar took a breather after a sweeping rally but notched a fresh 24 year high against the Japanese yen on Tuesday as U.S. monetary policy tightens and widens the gap with Japan's stubbornly low interest rates.
The yen ended up at 140.97, the lowest since 1998, and last traded 140.91 per dollar.
After the break of 140 the momentum was skewed for weakness, said Galvin Chia, an emerging markets strategist at NatWest Markets.
As long as yield curve control is in play, and so long as interest rate divergence is in place, one of the side effects would be a weaker yen. The dollar was slightly weakened from the highs on the euro and sterling, although recession fears and a gas crisis kept caps on both currencies.
The euro was up 0.36 per cent to $0.99605 on Monday after it hit a two-decade low of $0.9876, as the prospects for a winter without Russian gas sunk in.
Russia has halted gas flow along the Nord Stream 1 pipeline to Germany indefinitely, at first blaming an oil leak at a compressor station, but on Monday linked the stoppage to sanctions imposed by the west.
Gazprom's deputy chief executive Vitaly Markelov told Reuters on Tuesday that the pipeline won't resume shipments until Siemens Energy repairs faulty equipment.
The pound was last up 0.54 per cent at $1.1585 after falling to a 2 -- 1 2 year low of $1.1444 on Monday. After winning a leadership vote on Monday, Liz Truss is Britain's new prime minister and her promises of tax cuts add uncertainty to government finances.
Michael Every, global strategist at Rabobank said that Existential choices need to be made because there may not be enough energy to go round.
The Aussie was down by 0.05 per cent after the Reserve Bank of Australia raised its cash rate by 50 basis points and was last up 0.05 per cent at $0.6801. The kiwi was largely flat at $0.6096.
The RBA board signalled further rate hikes to come, but noted that it is not on a pre-set path.
In general, currency reaction to rate rises outside the U.S. in recent months, even if they exceed expectations, don't seem to have a temporary impact, said Ray Attrill, head of the FX strategy at National Australia Bank.
In Asia, Chinese authorities have tried to slow the recent depreciation, and late on Monday cut the foreign exchange reserve requirement ratio RRR, freeing up dollars for banks to sell.
The exchange rate was not affected by the move, with the yuan near its two-year low of 6.9510 in offshore trade.
The dollar index fell by 0.02 per cent to 109.58 after it rose to as high as 110.27 on Monday.